Warren Resources Inc. (Nasdaq: WRES) has announced its preliminary capital budget and production guidance for the full year 2015.

Warren is projecting approximately $80 million of capital expenditures in 2015, with primary focus on developing its Marcellus Shale assets. For the full year 2015, Warren expects production volumes to range between approximately 41 Bcfe to 43 Bcfe, a 95% increase over the midpoint of projected 2014 production, primarily due to the increased production volumes from the Marcellus assets acquired in August 2014. Warren expects natural gas volumes to comprise approximately 85% of total production in 2015.

The company is also reaffirming its prior production guidance for the full year 2014 of 1.10 -- 1.12 MMBbls of oil and 14.50 -- 15.25 Bcf of natural gas.

Warren is based in New York.

With the recent weakness in crude oil pricing, Warren is focusing its 2015 development program on its natural gas properties and budgeting capital expenditures in line with cash flows. While drilling activity is break even in Wilmington Field at realized oil prices of approximately $45 per barrel, the company says it can create greater long term value by deferring new development activity until oil prices improve. Therefore, the company is deferring its crude oil development activity in Wilmington Oil Field at this time.

Should crude oil pricing improve over the course of 2015, Warren has a plan in place to steadily increase its development activity in Wilmington Oil Field, with step ups in activity planned in proportion with expected free cash flow generation and risk-adjusted rates of return.

In Wilmington Field in 2015, Warren currently is budgeting $16 million for facilities and infrastructure, the majority of which will go towards the build-out of the Satellite 8 facility in the North Wilmington Unit (NWU) in order to enable future development of the western portion of the NWU, and the construction of a gas sales line from the Wilmington Townlot Unit (WTU), which will enable the sale of gas production from the WTU. The majority of these facilities and infrastructure capital expenditures can be deferred if there continues to be further deterioration of crude oil prices in 2015.

In the Marcellus, where production volumes have continued to outperform expectations and development activity offers attractive rates of return at current realized pricing, Warren has budgeted approximately $44 million in order to drill 7 wells and complete 8 wells in 2015.

In Wyoming, Warren has budgeted approximately $20 million in order to drill the 17 CBM producer wells and four injector wells deferred from the 2014 plan. This, in conjunction with the 2014 activity, will satisfy the Company's 2015 drilling requirement to hold all acreage within the Spyglass Hill mega unit.

Despite the planned reductions in 2015 development activity in the Wilmington field, Warren continues to expect strong total production growth on a year-over-year basis, primarily due to continued outperformance of production from the Marcellus. In addition, with a relatively moderate projected base decline rate in the waterflood properties of the Wilmington field and a strong inventory of locations in that field, Warren is well positioned to return to oil production growth once oil prices recover.